SSE plans to invest around £2bn largely in low carbon power projects this year and is weighing up further investments as the UK prepares to host COP26.
The company has created more than 1,000 jobs during the pandemic and expects to build on this number in 2021-22.
This investment is part of a £7.5bn investment plan to 2025 including building the world’s biggest offshore wind farm at Dogger Bank, Scotland’s largest at Seagreen and up to £2.8bn to be invested (by 2026) in connecting up huge swathes of new renewable power and transporting it via the electricity transmission system.
SSE re-emphasised its ambition to ramp up renewable development to reach a run rate of at least 1GW of new assets a year during the second half of the decade. This comes after it reduced the carbon intensity of its generated electricity to the lowest levels since its recording began.
It also said it will be seeking further opportunities overseas to export its renewables and engineering expertise to other countries.
Headlines from its full-year results for 2020/21, published today, included an increase in adjusted operating profit of 1% to 1,506.5m despite a coronavirus impact of an estimated £170m.
One-off disposals of non-core businesses aimed at sharpening its strategic focus on net zero emissions led to a reported operating profit increase of 185% to £2,743.5m whilst adjusted earnings per share increased 5% to 87.5p, within the expected 85p – 90p range.
Building on this, SSE confirmed it expects to kickstart a sale process for all of its 33% stake in gas network operator SGN, during mid-Summer 2021 which it hopes will be concluded before the end of the calendar year.
Over the last 10 years SSE has delivered around a £100bn economic boost to the UK and Ireland economies in jobs, supply chain contracts and tax receipts.
It did not draw on government support during the pandemic in the form of furlough or rates relief. Instead, it was able to boost employment both direct and through its supply chain as it led more construction of offshore wind than any other company in the world currently.
Alistair Phillips-Davies, SSE Chief Executive, said: “The UK is leading the world in the decarbonisation agenda and SSE is powering that change – we want to keep the momentum up and ensure the economic recovery helps tackle the climate emergency too.
“This is a pivotal year for the planet in our fight against climate change and as a Principal Partner of COP26, we are supporting the UK Government’s efforts to drive more urgent and ambitious climate action.
“At the same time we are focused on ensuring equitable social outcomes from the net zero transition; and through our investment programme we are building projects that will not only help tackle climate change but will create green jobs and revitalise communities along the way.”
Alongside its renewable investments, SSE’s electricity transmission business is anticipating spending £2.8bn through to 2026 to connect more green power in the race to net zero.
It is planning an undersea electricity superhighway on the east coast to bring more renewable power from the wet and windy north of Scotland to centres of population and is working on other potential opportunities to connect more islands to the electricity grid to unlock more renewable resources.
SSE is also working with Equinor to develop plans for carbon capture and storage in the Humber and Peterhead as well as potentially the world’s first hydrogen power station. It is also exploring options to build Coire Glas, a huge pumped storage hydro station that could power three million homes for up to 24 hours and act as a natural battery for when the wind doesn’t blow and the sun doesn’t shine.
Alistair said: “We are a business with solutions to support decarbonisation across the economy, options to create value and when combined with our operational expertise we are in a strong place to deliver towards the net zero challenge.”